Major in EU plea over single currency 'price of err

John Major will tomorrow issue a stern warning to his European counterparts about the "price of error" that will be paid by the EU if it fails to sign up for his proposal for an in-depth study of the impact of a single currency on the community as a whole.

The Prime Minister will press his case for EU finance ministers to conduct a study - between now and the end of 1996 - of the potential impact of monetary union on economic relations between those countries inside and outside a single currency, and on the planned enlargement of the community.

While the likelihood is that the EU Council in Madrid will back the proposal, Mr Major has gone out of his way to emphasise the importance he attaches to the study.

He has told colleagues that without it the EU could be sleepwalking towards the biggest change in the European economy since the Gold Standard, without proper consideration of the consequences.

Mr Major's line for the Madrid summit emerged as a Euro-sceptic parliamentary revolt loomed for next Tuesday over tonnage quotas agreed under the EU's Common Fisheries Policy 12 months ago. The eight former whipless Euro- rebels plan a Commons amendment challenging the agreement and seeking withdrawal from the CFP.

A more potent threat will face the Government if Labour can secure any Tory backbench support for an amendment of its own which will strongly criticise the fisheries agreement but stop far short of demanding withdrawal from the policy.

Gavin Strang, the shadow Agriculture Minister, claimed last night that the quotas agreement had been a "disaster from the standpoint of the UK fishing industry", and called on Tory MPs with fishing constituencies to back Labour's amendment.

Although Euro-sceptics will be be encouraged by Mr Major's demand for an inquiry into the single currency's impact, the move will not alter agreement to a timetable which leaves fully open the possibility that a core of countries will still go ahead with a single currency in 1999.

Moreover, it will be regarded as significant within the party that the pro-European Kenneth Clarke is to be one of those conducting the study.

Although the Chancellor shares Mr Major's concerns about the need for thorough scrutiny of arrangements for monetary union, he has made clear his forceful opposition to Britain ruling out joining a single currency.